As the costs of generating and transmitting information fall, the main bottlenecks in communication networks are becoming the human receivers, who are overloaded with information. For networks of targeted communication, this paper discusses the meaning of information overload, provides a theoretical treatment of its causes, and examines mechanisms for allocating the attention of receivers. Mechanisms for allocating attention include surcharges on communication and auctions. These mechanisms increase the cost of sending messages and shift the task of screening messages from the receivers to the senders. This shift may benefit both the receivers and the senders because the senders know the contents of the messages whereas the receivers do not. We show that, if the communication cost is low, then an increase in the communication cost benefits most (but not all) receivers. The increase benefits all the senders if either the extra cost is a tax that is redistributed to them as lump-sum transfers or if the senders' information about the receivers is sufficiently accurate.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2836.
Find related papers by JEL classification: D62 - Microeconomics - - Welfare Economics - - - Externalities D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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Eran Reshef & Eilon Solan, 2005.
"Analysis of Do-Not-Spam Registry,"
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1411, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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Eilon Solan & Eran Reshef, 2005.
"The Effect of Filters on Spam Mail,"
Discussion Papers
1402, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!]